PARIS — Withdrawing full-year guidance issued earlier this month, EssilorLuxottica reported revenues are slowing down due to the coronavirus in Europe and North America, which it expects to intensify, affecting profitability over the second quarter.
“At present, the company has insufficient visibility to provide an assessment of the full scope of COVID-19 impact, as the situation remains volatile,” the eyewear-maker behind Sunglasses Hut and LensCrafter said in a statement Friday.
The change in tone since the start of March, when executives expressed confidence amid a return of business in China, came as the company closed stores across Europe and the North America, following instructions from local officials, and suspended activities at production sites in France and Italy.
Production continues globally, said the eyewear giant, thanks to its network of plants and laboratories around the world, and production facilities in China are fully operational with spare capacity.
E-commerce is operating globally and is on the rise, with no back orders, EssilorLuxottica also said.
The company has implemented cost and cash control measures, suspended non-crucial investments and adjusted global capacity according to demand.
In early March, the company had said its projected synergies and financial targets, which included 3 to 5 percent sales growth, were based on the assumption that the COVID-19 outbreak would ease up over the next few months.
Formed in 2018 by the combination of France-based Essilor and Italy’s Luxottica, the 46-billion-euro merger has been fraught with challenges, including disputes between top managers of the French and Italian factions of the company in early stages of integration.